Virendra Pandit
New Delhi: Days after extending yet another loan of USD 1 billion to a nearly bankrupt Pakistan, China on Tuesday signed a USD 4.8 billion deal with its “all-weather friend” to set up a 1200 megawatt nuclear power plant, the media reported.
Of Pakistan’s burden of nearly USD 130 billion in external loans, China alone accounts for over a third of it.
Work on the Chashma 5 project would begin immediately, Prime Minister Shehbaz Sharif said on state-run news channel PTV after signing the memorandum of understanding (MOU) between China National Nuclear Cooperation and Pakistan Atomic Energy Commission, as he hailed the investment by a country that Islamabad views as its most dependable ally.
“Investment from China in this project to the tune of USD 4.8 billion sends a message loud and clear that Pakistan is a place where Chinese companies and investors continue to show their trust and faith,” Sharif said
The Chashma 5 project will be built in the central province of Punjab. China’s support will help Pakistan make the transition away from reliance on fossil fuels.
Pakistan’s total nuclear energy production capacity rose to 1,400 MW when its sixth nuclear power plant opened two years ago. Located in the southern port city of Karachi, that 1,100 mw plant was also constructed with Chinese assistance.
Sharif, whose government is desperately struggling to stave off a balance of payments crisis by June-end, thanked the Chinese partners for offering a USD 100 million discount for the latest project.
It is unclear, however, whether the new investment is part of the USD 65 billion that China has pledged to infrastructure building for Pakistan under its Belt and Road Initiative (BRI).
The new project was originally planned to start a couple of years ago. PM Sharif thanked the Chinese for not rescheduling costs despite the long delay. Instead, he said, China had disbursed an initial 30 billion Pakistani rupees (USD 104.53 million) to start the project.